Ok, a couple of things, you might have 1gb installed, but do you have onboard video card (that will use some memory and share it, so maybe 100mb is being used for that)...

Next, where did u see the 896mb ram? Is that total ram, or free ram... applications could be using 100mb, and you are miss reading it?

Next, the ram could be fault, maybe 1 chip is faulty... run Memtest to find any errors.

Finally, most systems can support upto 4gb memory (unless 64bit, which can go more)... but, depending on your motherboard and chipset, it might be limited to 1gb (which, for Dell, seems to be the case)...

goodluck